The SEC released the details of the fines U.S. District Court Judge Charles Pannell ordered against hedge fund manager Kirk Wright yesterday. Pannell ordered nearly $20 million in fines and penalties for defrauding investors through his hedge fund, International Management Associates LLC.
The judge entered a default judgment against Wright ordering the repayment of $17 million, interest of $2.7 million and an imposed a civil penalty of $120,000, the SEC said in the statement.
Wright's hedge fund came under scrutiny eventually for it's unusually consistent high returns, vague descriptions of investment strategies, aggressive marketing, no auditing, and secretive behavior by the manager.
From 1997 through early 2006, Wright raised as much as $185 million from 500 investors through a "fraudulent scheme" involving seven hedge funds that he managed through IMA, the SEC said in a lawsuit filed a year ago.
Wright was also spending too much for his funds, it was noted, a lavish wedding reception, the $55,000 engagement ring his bride wore, the entertainment suites at Atlanta Falcon football games, Atlanta Hawk basketball games, concerts, a Bentley, a Jaguar, an Aston Martin, a BMW, and a Lamborghini, and as proof of his investment returns, only photocopied spreadsheets.The firm also sent out quarterly statements misrepresenting the amount of money in those funds and their performance.
Wright was arrested in May on mail-fraud charges, He's in an Atlanta detention center awaiting a criminal trial related to the 21 counts of mail fraud and three counts of securities fraud, each carrying a maximum sentence of 20 years behind bars.
Original story; Fake Hedge Funds Cost Investors Millions
No comments:
Post a Comment